patience, will the u.s. economy force them to hike rates despite wall street temper tantrums? remember we've gone a long way since the fed had the 180. let'slet's go to jennifer schoenberger for the headlines. what do we look? >> charles, coming into the new year the economy continued to expand in the first quarter with most of the fed's 12 bank districts reporting modest to moderate growth but there are signs that growth is moderating. charles, manufacturing is moderating across the country, particularly in autos and the energy sector with oil prices falling. businesses show longer optimistic as they once were because of volatility in financial markets, falling oil prices, rise in short-term interest rates and general uncertainty about the political arena and trade. having said that the retail sales appear to be holding up strong across the country. most districts reporting that holiday traffic during the holiday shopping season was up

at the previous year. the job market also remains strong with companies finding difficulty finding workers of any single skillset. in fact that is constraining hiring and heading back growth. anecdotally in minneapolis there are construction first that say they are turning down construction work because they cannot find qualified workers. in chicago some firms are turning to automation for entry level jobs. that is due in part to higher wages and not wanting to pay those higher wages. speaking of wages, wages are picking up across the country across all skillsets and wages and inflation, firms report rising input costs, rising costs for materials, though their ability to pass on those rising costs to consumers remains mixed. the bottom line here, charles, the economy appears to be in good shape, however there are signs of potential fragility here particularly on the part of

business optimism. the fact that is waning f that continues that could open the door for slowing growth as we go through this year. now the federal reserve has said it will be patient. it will closely watch the economic data and financial markets before raising interest rates again. certainly fed officials will use this data especially in the absence of certain economic data from the government given the parks shutdown particularly with retail sales as they look to their next meeting here in the next two weeks. charles? charles: jennifer, thank you very much. i should let the audience know we ticked up to the highs of the session as you were reading off some of those highlights. i want to bring in lending tree economist and along with "wall street journal" global economics editor jon hilsenrath. let me start with you. your initial assessment what we just heard? >> the two big things were discussion on business confidence. i think that could be difficult for the economy and the other thing they spoke about was the challenges finding labor and

price pressures. if we continue to see price pressures and wage increase in the economy the fed may have to rethink this dovish tilt. charles: jon, what is everyone sort of kind of worried about here. the fed made a 180-degree turn in part because of pressure from the stock market and now we're hearing from all these different sectors where labor, they're missing out on business and it is obvious they will have to start raising waynes even more. >> yeah. you know, this report is really important for a couple of reasons. one of which jennifer pointed out, because the government is shut down, we're not getting the regular flow of economic data that we usually get, for instance, today, report on retail sales was supposed to be out but it has been delayed. so this is like one of the, one of the few real-time indicators we have how the economy is doing. we see conflicted pressures. on one hand looks like business optimism is being hurt a little bit. manufacturing activity is being

hurt a little bit by the global slow down. on other hand labor market is so tight companies can't find enough workers, that should put upward pressure on wages. i think the tilt of this report is that the economy looks like it is taking some hits right now and i think that underscores the fed's point of view they're not going to raise interest rates for a while. charles: tim, is that the way you see it? i think jon is right with respect to jennifer used the word fragility when it comes to business optimism or confidence. you picked that up. by the same token we know holiday sales were strong. only one district mentioned a the shutdown. there are geodomestic political issues out there, not impacting business, impacting psyche of business but not business itself. so where does this put the fed? do you think the fed starts to go back, sharpen the pencils or is the thinking different now at this moment than it was 24 hours ago? >> i don't think it is that different. i don't think it shifted

significantly. i think the market interpretation of what the fed is saying shifted more than -- charles: the market to the too confident with respect to the notion that the fed won't raise rates at all this year? >> i think they got too confident in kind of a hawkish view of the fed and recent confidence got them too too dovish on other side. we have the potential government shut down and debt ceiling not getting all the data they should have. i think the risk is the back half of the year. if we see accumulated rate increases we might end up with two or three hikes in the back half of the year. charles: three months in a row of 3% plus annual wage increases. i went back, i think last time that happened was early 2009, jon. >> yeah. charles: as we were going as we were in recession so does it automatically auger for rate hikes that there will be inflationary pressure just because wages are going at 3%?

that was not necessarily the case last time they were at this level. >> no, i mean what the fed looks at inflation, it looks at consumer price inflation. the fed wants to see wages rising f they're rising for the right reason. when you have worker productivity increasing and pushing up wages that is a good development and the fed doesn't have to respond to that. right now, we are not seeing much inflationary pressure. you know the consumer price index came off a little bit recently and that is one of the reasons why fed chairman jerome powell says he thinks he can be patient. charles: tenday, bank of america came out with the survey of fund managers around the world, almost trillion dollars worth of management and their impression, maybe not deflation, but certainly significantly slower inflationary environment around the world shifted dramatically.

that is one of the top concerns. jon mentioned that. that is that something that could happen? could we despite the strong job market, despite higher wages be on the verge of going into some sort of deflationary spiral? >> i don't see where that risk comes from for the united states. charles: okay. >> if we look at inflation, we have services inflation and goods inflation. services inflation is essentially wages. >> okay. >> goods inflation, a lot of goods come from abroad with the tariff issues. charles: lending tree, strong housing mortgage application number, back-to-back weeks even on purchasing. is that turning around? >> housing market got a reprieve because interest rates are down 50 basis points since the end of november. charles: should we thank jay powell for that? >> we can thank jay powell and thank the market for i said earlier overreacting for dovish sentiment from the fed. charles: thank you guys both very much. appreciate it. joining me capital wage editor

shah ghailani, and mike murphy. let me start with you, mike, last time you were on you said financials. i thought you were kidding. but you were serious. up until they looked iffy, even though they traded higher, they were able to do a great song and dance at conference call about citi or jpmorgan. today great bonified news from the financial sector. >> thank you for keeping score. citi led it off, their quarter was food, definitely not great but the stock sold off so much you saw rally in citi. you started hearing good news out of bank of america and goldman sachs, and that is lifting jpmorgan which had a miss for the first time in 15 quarters this has been an overlooked sector. all the big financials are way off their highs. they're having a nice rally. i still like them here. charles: shah? >> i agree with mike. all financials are hit pretty hard. this is a refresh moment for them coming off the lows.

looks like they want to be the new leadership group in the market. if they are the market has a ways to go higher f not the financial falter here i think it is good luck for the market. charles: you don't think they will, though, right? from what we saw, some of this also, bank of america, they're controlling costs. they're doing different things. >> yes. charles: not necessarily top-line growth that is filtering down to the bottom line. they are making business adjustments that helped this quarter so far. >> that is good thing, sorry, shah. that is a good thing. if they were spending too much money we would opinion niche them for it. because they're reining in spending we should reward them. charles: do they want to see more lending? i always say it is novel idea for when banks lend for so much point in time all they did was trade. >> i want to see going forward we want to see lending out of the bank. that proves there is demand for loans and at that proves the economy has a chance to go forward. charles: were you surprised as jennifer was talking about this

fomc -- we get modest and moderate. that is in every one of them but, you know, the sort of business confidence waning just here a little bit, fragility in different parts of this economy, do you think, in your mind that changes the dynamicses of the fed where we are now? because we're near the highs of the session and feels to me if the fed has any reason to step in, wall street may be caught flat-footed? >> no. maybe this is oversimplistic, but the fed came out looking to raise rates three or four times next year. it spooked market. it started a big selloff. then they walked statement back. they said they were going to be data dependent. fed funds futures were not pricing a rate hike for next year. if we have fed tightening market will go back where it was. we'll need earnings and earnings growth to get there. the financials sold off hard after we thought the fed was hiking. now they're putting up decent

numbers. charles: financial airlines reported last night after the bell, a great number. the stock is up. that is what you want to see, when you see airlines not necessarily doing well, we know there are a lot of exogenous things that impact like oil prices but has to be proxy for health of the consumer. you want to see the stocks do pretty well. >> you want to zoo them doing pretty well, consumer spending money traveling, consumer picking up, yes that is important. in terms of the airlines probably a lot of them will get hit and a lot hedged against rising oil prices. the hedges will cost them as prices come down. how they manage that going forward will be another issue. the reason market came down because prices were high. the fed followed sentiment said we can't go along and hammered the market by raising rates or potentially raising rates. we have the balancing act. sense where we will be and where we're going to go. charles: are you eddie to say

the worst is over? >> no. i would love to see where weigh are now, major benchmarks, if we stay above the levels and consolidate here i think worst is over. if we go below these i'm not so sure. charles: mike? >> as long as the government shutdown ends, don't drag on too long, i'm a hot more confident. i will say the worst is over. charles: ends, week, two weeks, state. union? >> today? charles: say sometime in march, you already got march, brexit march 29th. we have china, u.s. trade, march 29th. throw shutdown must be over by march 29th? >> by the march calls. we'll be all right. charles: so, then what is the thing standing out to you the most so far today? >> technology. charles: this year has been an amazing year. it has really been amazing since that christmas eve collapse. i equated it at time. i said to people to me, that was black monday. it was not a harbinger of recession. it was excellent time to buy. i thought that was, for lack of a better term our puke moment,

to be down 650 points in half a day of trading on no news ahead of christmas. >> you're 100% right. you've been 100% right. charles: you're combing back tomorrow. >> hope you continue to be right. you hit the nail on the head. your timing was excellent. i hope this is sustainable. i think the worst is over. i'm not sure we have seen the worst of everything yet. we have yet to hold up against, right now we're at terrific levels on s&p, on nasdaq composite and on the dow, if we stay above 24,000, stay above all the benchmark levels we're at now, we can consolidate and go a lot higher f we don't i think we revisit the lows. charles: a lot of complaints about lack of volume. i've been hearing that since 2009. really telling you since the bottom in 2009, when we started coming back all the experts said don't buy it yet. we need to see more volume. a lot of them are still waiting. >> they will be waiting. just push that aside. it's a different market today than it was in 2009. there are a lot of more important things that i look at than volume. one thing i say we'll hear from

netflix tomorrow. we're getting banks showing some resiliency and moves higher. we need big tech. they have been reset. amazon was 2000. it is almost 1hundred. facebook from 180 down to 150. apple, big tech needs to pick up and move on earnings. charles: of course netflix up 50% already. a lot of people, to have that price hike increase, right before the earnings -- >> going to be interesting tomorrow. charles: guys, thank you both very much. shah, mike. we're moments away from the latest no confidence vote for britain prime minister theresa may's government as parliament overwhelmingly rejected her brexit deal with the eu. we'll take you live to london coming up. also we're on the cuspp of a major breakout for this market. talking about a technical breakout. shah alluded to it. so far the earnings are living up to the hype. so where can you make money? we'll be right back. ♪ e

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talk to your doctor right away if you notice pain or swelling in your arms or legs, shortness of breath, chest pain or rapid breathing or heart rate. tell your doctor if you are pregnant, breastfeeding, or plan to become pregnant. common side effects include nausea, infections, charles: brexit vote has been announced. the initial report is that they have rejected it. go right now to london, ashley webster. ashley is not there yet, so we set the stage, as you can see it's a pretty raucous situation in the house of commons. yesterday, theresa may suffering one of the worst defeats in history. in fact the last time a treaty was rejected by the british parliament was in the 1 1800s. give me number once again? it was pretty close. vote was 325-306. by narrowest of margins, theresa

may survives another no confidence vote. now what happens, she suggested that with this victory, her next move was to go to the eu tomorrow. remember she made several trips to brussels to, germany. she talked to angela merkel, essentially going hat in hand, trying to get a better deal for the uk. let's go there ourselves, to london, our man ashley webster. ashley. ashley: hey, charles. the vote finally 325 no votes, 306 yes votes. that means theresa may indeed survive ad vote of no confidence as expected. don't forget last month she survived vote of no confidence within her own party. make no mistake the pressure is still very much on theresa may. now she has to work with opposition members to get some consensus to make changes to her brexit deal. then she will have to go to brussels to try to get concession is, movement on those details of the brexit deal.

i believe theresa may is speaking now. let's listen in. >> make a statement about the way forward. the house has put its confidence in this government. i stand ready, i stand ready to work with any member of this house to deliver on brexit and insure that this house retains the confidence of the british people. [shouting] >> mr. jeremy corbyn. [shouting] >> thank you, mr. speaker -- ashley: there you have it, the prime minister saying now to get on with the business of putting a deal together that respects the result of the brexit referendum back in june of 2016. but again, it won't be easy, charles because there are some red lines for theresa may, red lines that her opponents say she is just not flexible on. the european court of justice, the customs union, the free movement, which of those red

lines is she willing to give up in order to get this deal through? so far she says no, she will not buckle on those three key points because she says, that is what people voted for when she voted for brexit. so the next move here, the next couple days she will be meeting with other lawmakers, opposition lawmakers, seeing if she can find some common ground. she comes back to parliament next monday, basically deliver what her plan b is. there will be some debate on that. then she heads off to brussels to see if she gets any shifting, any movement from eu leaders. it will not be easy. again the question being is, will the prime minister be more flexible? because clearly her plan just cannot pass this house of commons vote. stalemate goes on and for theresa may, charles, the pressure remains very intense indeed. charles: it does. ashley webster, thank you very, very much. again, the question now is what happens from here? want to bring in nile gardiner,

nile, it appears that there are three options. an extension of article 50, to revoke article 50 all together, or perhaps a hard brexit which is what i assume the british people voted for in the first place? >> well by far the best option, charles is britain to move forward with a no-deal brexit. that is the only way in which the prime minister can guarranty full british sovereignty and self-determination. this is what the british people voted for in june 2016. they voted for britain to completely leave the european union. this is what vote leave, the main brexit campaign, campaigned upon and i think any alternative right now to a no-deal brexit would be a tremendous compromise, a surrender to the european union and this is the only way i can see forward for the prime minister now although i suspect she is going to seek an alternative route to this after a series of disasterously

weak negotiations with the eu i imagine that she will offer more of the same unfortunately. charles: won't in a perverse way, the last 24 hours for theresa may, doesn't that strengthen her hand when she goes back to brussels? because they have to understand the position that she's in and, it is hard for me to believe, despite all the talk of a trillion dollars leaving london and going to frankfurt and uk cut out of economic benefits of continent, they are eager that the for the to be enforced? >> britain is doing verying very well in the brexit ear economically, i think brexit would be great for britain's long-term economic future despite all the doom and gloom projections. i think that, you know, with regard to theresa may, her fundamental weakness has been an

inability to stand up for her own country. inability to stand up to the mandarins of brussels, the eu bureaucrats. she has handled all these negotiations in the past two years with the eu from a position of weakness instead of strength. and i expect when she goes back to brussels, in the coming weeks, as i expect she will outline probably on monday, i don't think she will get any real concrete results from the eu at all. and in fact european commissioners made it abundantly clear they will not make any concessions to britain. i expect that the only concessions being offered will be from theresa may, in the other direction to the european union. there is no way that parliament would accept another watered down, you know, extremely weak-kneed eu withdrawal agreement negotiated by theresa

may with brussels. charles: nile, i read reports that perhaps eu will extend olive branch, hey, let's extend this for a year, perhaps even two, to continue to work towards a negotiation that we both can live with. if that were the case, would that be acceptable? >> well, i think that's, reports are indicating that the european union is considering extending article 50, which is the legal mechanism which governs the date of britain's departure. now in my view this would actually be completely unacceptable because what it does really is it pulls out, it draws out the eu withdrawal process for britain, basically, it would increase the likelihood i think that brexit would never take place at all. charles: right. >> this is of course the goal of the european union, to reverse brexit. if they offered this olive branch it is a poison chalice if

the british government accepts this. charles: i think people of the uk agree with you. nile, appreciate your expertise. thank you very much. >> my pleasure. thank you very much, charles. charles: folks we'll be right back. the dows near the high of the session, by the way. we'll be right back. great news, liberty mutual customizes- uh uh - i deliver the news around here. ♪ sources say liberty mutual customizes your car insurance, so you only pay for what you need. over to you, logo. ♪ liberty. liberty. liberty. liberty. ♪

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charles: stocks higher again today, banks leading the way. banks reporting 39% surge in earnings. goldman sachs reported strong result as well. could the markets be on cusp of a major technical breakout? jason rotman, managing partner, lido isle advisors and president of kaltbaum capital management, gary k.. gary, you got bullish and dragged you in like al pacino from "the godfather," the fed brought you back in.

are you happy with the markets doing or can that continue? >> fateful day, january 4th, as soon as powell mentioned markets i knew. not just that, europe, japan, telling people for months they would stop printing by the way, china added $83 billion to the banking system overnight that is fueling a lot of this. i have to tell you, i have studied 100 years of history. i have never seen a bear market if financials are leading and are strong. not just the goldmans, but you add jpmorgan, and pnc bank coming with bad numbers. both opened down and both being bought up. under my number one rule, not the news, how things react to the news, so far so good but we're in the meat of resistance. i think we'll get a little bit choppy here,far so good. i've seen no institutional selling whatsoever just yet. charles: jason, for me, 24,450 on dow could be magical number,

2600 folks on s&p, beginning of resistance, 2800 we break out. are we in the midst of that technical test, and if we get through there, what does that mean? >> i think we're not there yet which is good comment if you're bullish. i think it's a fairly safe bet we'll rally, stock index, s&p rally another 2 to 3%. my number s&p 2700, obviously a few percent above here. that is my meat if you want to call it that, of really hardcore technical resistance. we're not there yet, path of least resistance at this point, technically, fundamentally with the bank earning, gary said, upside, two or 3% pretty safely. charles: financials show leadership they would show in 2018. never showed up. communication services a lot of old tech names, what role, jason do they have to play, beginning with netflix that reports in two days, or tomorrow, tomorrow after the close?

>> companies like netflix i, i believe are really not a proxy for the overall financial system anymore. listen if netflix goes up, 10%, tomorrow, if it goes down 10% tomorrow, will nasdaq obviously follow that a little bit? yes, you will get some knee-jerk reactions. listen the stock market is bigger than netflix. the goldman sachs earnings are bigger than netflix. would i stay away from focusing on companies like that earnings too much. charles: gary there is a psychological factor for the market. people watch momentum names to take their cue. >> look, there are certain names that are bellwethers, not only because of the fact they're big to the indices, but also because their psychology. apple comes to mind. amazon comes to mind. yes, they do mat ear certain bit but for me, there is like two to three how companies reporting over the next four or five weeks. if we see, keep seeing bad news

being bought up and good news being bought up feverishly we're being brought up higher. i want to make the point again, we're into the meat. people are back to even. they will want to sell, thanking the lord back to even. that provides some traffic. so we'll probably get a little bit choppy here, the most important thing, i deal with evidence at hand, weight of the evidence, so far markets are persistence. there has been no big money selling. any intraday sell something is bought up pretty decently like today so far. charles: jason a lot of money on the sideline always talked about. volume is relatively low. if we get to the 2700 number, would you expect a lot of money to pour in. panic pendulum goes having to sell, i have to get into this. what do you see leading market higher? >> you know, i think it is obvious. you could argue that if and when the government shutdown gets

behind us, versus walking through it, i think that is a clear as ever impetus for mom-and-pop investor on main street who fall the news, pay attention to the big headlines which is not a bad thing i'm saying. once the public sees that government reopens, then the coast is clear, they will pile in. better to get in now. charles: getting a wrap signal. we should point out the nasdaq is up 10% since the shutdown began. the last time market shut down was 1990. the media will continue to play it up. it will be a disaster soon if media has anything to do with it. love your expertise. thank you both very much. >> thank you. charles: sears, they will live to see another day. chairman and largest shareholder, eddie lampert he wanted bankruptcy auction. helping iconic brand to help for liquidation now. keeping roughly 400 sears stores open. the billionaire sweetened bid for the company. he steered into bankruptcy

protection with more of $5 billion affiliate of his hedge fund. the 132-year-old sears, which operates kmart filed for bankruptcy in october with less than 700 stores at its peak, it had 4,000. new darling of the democratic party getting a prime committee assignment, joining fellow liberal maxine waters on the financial services committee. could this be a setback for wall street? that's next. see that's funny, i thought you traded options. i'm not really a wall street guy. what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy.

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♪ charles: stocks hitting session highs with bank earnings. theresa may surviving a no confidence vote. we'll have much more on that and these markets later. artificial intelligence changing

workforce, not just individual jobs but industries as a whole maybe even the supply chain. we'll take a deep dive into that. freshman liberal congresswoman alexandria ocasio-cortez will serve on the financial services committee in the house on wall street. she tweeted, i'm looking forward to digging into the student loan crisis and exploring public and postal banking. i'm grateful for the opportunity to sit on this committee as a fresh man. with maxine waters chairing the committee, not should wall street worry but how much should wall street worry? senior fellow for the national taxpayers union, mattie duppler. how concerned should wall street and consumer be? >> couple changes, not just ocasio-cortez new addition. diana pressley from massachusetts, katy porter from california. a lot of fivery new freshman joining maxine waters in that jurisdiction. the question how does maxine

waters manage that unruly group of freshmen, combined with moderate democrats on that committee? it is interesting because ocasio-cortez in the past said she really wants to take on the trump deregulatory agenda but i would remind her the most significant unraveling of financial regulations happened at the hands of congress last year with passage after bipartisan bill that got 67 votes in the senate to undo dodd-frank regulation creating a lot of mess in financial institutions. charles: right. >> that is something certainly on the mind of other members already sitting on committee. charles: those are small banks, even frank himself, barney frank after he left congress admitted went too far. hurt small banks, hurt chances of small businesses, small lenders, borrowers. i think she has a kinship with maxine waters. i've been watching fiery maxine waters go after alan greenspan and ben bernanke and she is has complained bitterly on things on local level. she wants more community

reinvestment. she wants to bring big banks to hair knees or at very least do some redistribution of their income. so i think this is the perfect team for her. we know that they can't do much with the senate perhaps and presidency in republican hands but they can make a lot of noise and perhaps change the public discussion? >> you know that will be an interesting question to watch. maxine waters is no shrinking violet. she is not someone who will take a back seat to allow the freshmen come in, set the agenda. she is seasoned member of congress, spent many years building up relationships within that committee as well as stakeholders affected by what business the committee does. i don't think she will want to walk in to this congress, throwing bombs ruin all that work she put into place. charles: right. >> i would look how the senate dealt with the banking bill last year. elizabeth warren running fund-raising emails against her colleagues, democrats in the senate for supporting that by i think we'll see a lot of political tensions be borne out by the work that the committee

takes on the house side with these kinds of personalities on the committee. charles: mattie, before i let you go, a lot of democrats, i call them elite, established democrats, as well as a lot of folks on the republican side dismissing aoc or alexandria ocasio-cortez. i think they're making a huge mistake. i don't know that she will flame out or anything like that. she does represent something, not just in her district but around this country, a sort of anxiety, if you will, and i think it's a mistake to just completely dismiss her? >> i agree with you there. as a young woman involved in politics myself i'm exciting to see someone who is just as energized as i have been for the last several years have a position in congress able to do something about the things that she thinks is wrong with this country. we of course have very different political visions what those solutions are. i would just caution there are a lot of new members coming into this congress. she is a freshman member. she doesn't have a seat on ways and means. when we talk about some of her ideas, let's acknowledge how

much opportunity she has to enact into policy. charles: think about throwing your hat into the ring, thanks, mattie. >> thank you, charles. charles: a new investor survey finds growing anxiety over the global economy so we'll dig deeper into that. i will ask the question, with the explosion of robots why are we outsourcing american jobs overseas? we'll discuss that next. ♪ [ phone rings ] hey maya. what's up? hey! so listen, i was taking another look at your overall financial strategy. you still thinking about opening your own shop? every day. i think there are some ways to help keep you on track. and closer to home. i'm all ears. how did edward jones grow

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charles: the long anticipated age of robots and artificial intelligence is upon us. as we cheer innovation many wonder what the eventual human toll would be? i would hope it would blow up the so-called supply chain, excuse for offshoring american jobs. then this morning i read about a u.s. camera equipped robot patrolling grocery store aisles looking for spills. what happens, the robot will detect one and alert a human worker in control center in the philippines. joining mebane company's karen harris. >> thanks for having me. charles: we're all excited about

all the automation, we're in the mid of it, right? we are making transition. impact how it impacts jobs and king blood, don't worry about it, but this time it feels different, doesn't it? >> i think you're absolutely right. we're early in the phase of robotics and automation in the especially the service sector. when bain looked at the project, with machine learning, kind of sensors you have, human dexterity available today, between now and 2030, we could lose 30 to 40 million jobs, which is 20, 25% of the workforce. so the most disruptive thing happened to the labor peel in 100 years. charles: in the past of course, the fears were over, they were overcome by productivity, different jobs that were opened up. i mean we won't, there won't be a parallel 30 or 20 or 30 million jobs replace those that are lost? >> eventually i believe in the innovation of the american

economy. but eventually we'll be better off. charles: robot build as robot, if computer gets smarter and smarter, where do we knit in in that equation? >> good question. we know there are jobs humans are better at doing. think about elder care. there is a physical labor of helping a older person but the cognitive stimulus, playing games, listening to stories. charles: reading a teleprompter. >> reading a teleprompter. that forestalls dementia. we'll see innovation. to your point, the transition, this is twice as broad and twice as fast as the transition from agriculture to industry. so it will be a turbulent period while we go through this? charles: can it change, it is interesting, we're in the midst of a big dispute with china. a lot of big businesses with arguing, hey, you're disrupting supply chain. to me a euphemism for cheap labor. if robots are doing so many job, wouldn't supply chain change in of itself and wouldn't he be

beneficiaries of that? >> sequence something really important. when bain looked at this work, we looked at demographics, automation and the impact on inequality. what we saw right now we're in a period for the first time in decades the labor pool is getting smaller globally. to your point, as the labor pool was expanding, labor got cheaper overseas, we built the long supply chains. now that labor, the labor pool is shrinking in china and germany, grow slowly in the u.s. costs rise, robotics get cheaper. we see up tick of automation replacing workers that should and will bring more and more production onshore in developed countries like america and create some real strengths for emerging markets count on shipping to us. charles: tough for angela merkels, great news for america. in the transition period, in your report you talk about 10 or 15 year boom. you talk about highly skilled or high income labor. general motors announced we're

closing a plant, they couldn't say, hey, we know the people are working here 30 or 40 years, they couldn't say they don't have the skillset to do what we need them to do that is really probably what is going on here. how do we get americans the skillsets? >> that is the their step, demographics, inequality and automation, go to highly skilled work years who is responsible, government, business or combination of both? >> it has to be combination. our clients are worried about helping people who work for them find new jobs and new opportunities. charles: right. >> but each individual company can't help everyone. we all need to participate. charles: karen, thank you very much. really appreciate the conversation. by the way, folks a new survey from bank of america merrill lynch, that survey goes out with all these big fund managers and guess what? they're piling into tech again. is it a smart move and should you follow the big fund managessers? we have the final hour of trading where you should put your money next. ♪

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charles: we're heading into the final hour of trading. financials leading the charge and we're near session highs. could this up day be sort of an aberration? according to a new survey from bank of america merrill lynch, investors have never been more pessimistic about the global

slowdown, also profits, so they're really worried about that. should you be? want to go to president kadina group gary b. smith. i love that survey in part, because it's good to see all these big fund managers are usually wrong, but having said that, you know, it's a conflicting time because they admitted to pouring back into the fang stocks. >> yeah. look, kind of to your first point, i think it's always good to lean against the crowd, if you will. everyone became kind of pessimistic because -- rightly so, because of all the head winds. brexit, just happening over the last few days, the fed, the shutdown, yet despite all these head winds, none of which has been really resolved to the upside, the market continues to trend up. can you imagine if we got a china trade deal at this point? oh, my gosh, the market would really rocket. to your second point, very quickly, look, i think tech is the place to be.

think of all the areas we're excited about right now. 5g, self-driving cars, artificial intelligence. it's all in the tech group. not many people are that excited about the next model car that gm is going to come out with and even if they were, it would probably be driven by technology. charles: it will be driven by technology. by the way, ford announcing they will revamp 75% of their lineup, mostly that of the suvs. those older industries have struggled a little bit. is there something wrong, is it finally that at least we have leadership today from financials that tech/communication services don't do all the heavy lifting here? >> it is a positive sign we finally do have different leadership. financials were the hoped-for leadership group that was supposed to come out of the pack when technology faltered. they didn't. now they seem to be taking the lead. charles: are you long any financial names? >> i'm not long anything right now. i'm 100% in cash. charles: when did you get long? >> we are at very critical levels. we are above 24,000, i would

love to see it consolidate. in the nasdaq, above 7,000, i would love to see us consolidate here. charles: do you have a buy list? >> i have, yes, a very large buy list. a lot of them are beaten-down stocks, facebook, google, microsoft hasn't been beaten down. i got a huge list of technology stocks and i have, i like the financials. goldman sachs, i would like to own, except its pop today worries me. it was a huge short position in goldman sachs across the board and obviously they came out with better than expected earnings, they still have the issue ahead of them. is that going to be a one-off pop because of short covering or what's the market going to do from here? charles: gary b, after the close we get the csx, huge day for united. the transpos up until the fall were leading the way, sort of confirming the old dow theory. how important is it that we do get some of these rustier industrial material names in the mix even though they don't have what's necessary to lead the parade? >> well, look, from a making

money perspective, in most people's portfolios, i think it's obviously becoming less and less important. people are buying the amazons, the alphabets, et cetera. from a feel-good standpoint, psychological, absolutely we want the old -- old, sorry, the more mainline industries to do well. but you know, honestly, i'm really not that concerned how ford does, how a railroad does. a lot of those industries, charles, as you well know, ride on the back of everything else doing well. financials can't rise unless the rest of the industries are doing well because they lend money as things accelerate. i'm more concerned these days if netflix is doing well and amazon, the kind of companies i think are leading the charge. charles: real quick, gary b, are you in netflix? >> yes. and i own amazon. charles: amazon and netflix. the reason i ask is because

that's going to be the next big perhaps broad market mover. we do get rusty stuff tonight. also rumors president trump may visit the pentagon tomorrow. keep an eye on the defense contractors as well. thank you both. liz claman, over to you. liz: government drama around the world be damned, look at this rally here. it's the big banks leading the charge in the final hour as goldman sachs and bank of america impress investors with fourth quarter earnings. both are dow components and the dow is spiking right now by 185 points. what do we have? just a second ago it was up 205. can we climb even more? s&p 500 better by 10 and the nasdaq sees a nice gain of 20 points. as the partial shutdown of the u.s. government continues, though, president trump is expected to sign at any moment now the government employee fair treatment act of 2019. what is that? well, it's apparently an act that ensures furloughe